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Auto-Enrolment and Work Place Pensions – advice for Solicitors’ Firms

As well as keeping their legal accounts in order, Solicitors need to be aware of their Auto Enrolment date for providing pensions for staff. In the following article James Toulson of 1 Less Worry Payroll Services explains clearly the obligations on firms and the implications should you fail to enrol

Why has Auto-Enrolment come about?

In the past, many workers missed out on valuable pension benefits, because their employer didn’t offer them a pension or they didn’t apply to join their company’s pension scheme.

The Government has introduced Auto-Enrolment to help more people save for their future. This means that employers will need to automatically enrol some workers into a workplace pension plan and give other workers the option to join.

I only employ one person!

Automatic Enrolment applies to all employers who have at least one member of staff. It doesn’t just apply to businesses; if you employ someone directly to work for you – like a cleaner, personal care assistant or nanny, for example – you are an employer and will need to ensure that any eligible employees are enrolled into a workplace pension.

When does Auto-Enrolment come into force?

Staging dates for Auto-Enrolment vary for every employer: some have already staged and many more are staging in January 2016. You will need to visit The Pensions Regulators Web site to find you’re staging date, you will also need your PAYE reference.

Your employer duties will depend on the types of worker you employ. You’ll need to automatically enrol some workers into a pension scheme and arrange membership for others. You’re also responsible for the ongoing maintenance of the scheme and have an obligation to keep certain records.

What are the categories of Workers?

Eligible Workers: – Must be automatically enrolled, and you must contribute to their pension on their behalf.

Non-Eligible Workers:- Must be offered access and can request to join the scheme. If they choose to join, you must contribute to their pension on their behalf.

Entitled Workers: – Must be offered access and can request to join the scheme. But you do not need to contribute to the scheme.

Age

<£5,824 PA

£5,824- £10,000

>£10,000 +

16-21

Entitled Worker

Non-eligible Worker

Non-eligible Worker

22-SPA

Entitled Worker

Non-eligible Worker

Eligible Worker

SPA – 75

Entitled Worker

Non-eligible Worker

Non-eligible Worker

Minimum requirements

The minimum contribution level required for an Auto-Enrolment scheme is based on qualifying earnings.

Qualifying earnings are a band of earnings of more than£5,824 and £42,385 or less. These figures are for the 2015/16 tax year and are expected to change each year. Qualifying earnings include salary, wages, overtime, bonuses, commissions, statutory sick pay, statutory maternity pay, ordinary or additional statutory paternity pay and statutory adoption pay. To allow you to spread the cost of your employer duties, you can phase in the minimum contributions.

What to do next?

Once you have your staging date you need to start planning the next stage.

Contact your payroll provider, are they able to run the Auto-Enrolment process?

Find a registered I.F.A to help select a suitable pension scheme

Keep the employee informed of what is happening with regard to the scheme.

You must register that you have an Auto Enrolment scheme in place with The Pensions Regulator (TPR) no later than five months after your staging date. You’ll also have to re-register every three years.

What happens if I do nothing?

The employer duties are not optional. TPR will be responsible for ensuring that you comply with your employer duties. Although TPR’s approach will be to educate and encourage compliance, you’ll face substantial fines or even imprisonment if you don’t comply.

Still need Help?

I hope this brief analysis helps you understand a little bit more about Auto-Enrolment Please contact 1 Less Worry Payroll Services on 01752 366348 or email [email protected], if you require any future assistance.